BUSINESS

Why Himachal’s Pharma Industry Isn’t Panicking Over Trump’s 100% Drug Export Tariff

When news broke that U.S. President Donald Trump was imposing a 100% tariff on drug exports starting October 1, it sent shockwaves through India’s pharmaceutical sector. But in Himachal Pradesh—a state known for its thriving pharma industry—the mood is surprisingly calm.

So, what’s behind the confidence?

The Generic Advantage

Turns out, Himachal’s pharma backbone is built on generic medicines. Nearly 95% of the drugs manufactured in the state fall into this category. Unlike branded or patented drugs, generics are not affected by the new tariff. That’s a huge relief for local manufacturers.

“Trump’s tariff won’t hurt us,” says , President of the Himachal Pradesh Drug Manufacturers Association. “Most of our sales are from generic medicines, and those aren’t included in the new policy.”

Baddi: Asia’s Pharma Powerhouse

The Baddi-Barotiwala-Nalagarh (BBN) industrial belt in Himachal is often called “Asia’s Pharma Hub.” It’s home to production units of some of India’s biggest pharmaceutical companies. Every year, BBN ships out medicines worth crores—not just across India, but to international markets too.

And what’s being shipped? You guessed it—mostly generics.

What Are Generic Medicines, Anyway?

Generic drugs are essentially low-cost versions of branded medicines. After a company develops a formula to treat a disease, it creates a chemical compound called a “salt.” Big pharma brands give this salt a fancy name and market it. But the generic name of the salt remains unchanged—and multiple companies can produce it under that name.

These generics are just as effective, but far more affordable. A special committee decides the generic name based on the salt’s composition and its intended use.

Tariff Targets Branded Drugs—Not Generics

The new U.S. tariff applies only to branded or patented drugs. Generic medicines are exempt. That’s why Himachal’s 695 pharma units—most of which deal in generics—aren’t sweating it.

There’s another loophole too: companies that are building manufacturing plants within the U.S. won’t be subject to the tariff. If construction has already started, they’re in the clear.

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